U.S. Treasury Secretary Tim Geithner “could have a criminal liability” for not doing more to halt the Libor scandal when he became aware of it in 2008, says Jim Rickards, a partner at JAC Capital Advisors.

When Geithner, then president of the Federal Reserve Bank, learned of problems with Libor, he alerted the Bank of England. U.K. regulators are in charge of overseeing Libor.

But Rickards tells Yahoo Geithner may have had a legal obligation to do more. “Why didn’t he call the Justice Department? Why didn’t he call the FBI?” Rickards says.

“You can't witness a crime and not call the cops. Geithner might be guilty of aiding and abetting a crime.”

Geithner has declined to comment on his actions.

Rickards doesn’t expect the Treasury Secretary to actually be charged with any crime. “The Justice Department will finesse it," he says.

The magnitude of the crisis is huge, Rickards notes. The price of more than $500 trillion of swaps is based on Libor, he says. So a distortion of the rate by 10 basis points over five years means $2.5 trillion of fraudulent transactions.

Federal Reserve Chairman Ben Bernanke told Congress Tuesday that Libor should be reformed, but that the Fed can’t do anything, as the rate is regulated in London.

"I would like to see additional reforms to the Libor process, assuming that Libor will continue to be a benchmark for financial contracts," he said.